The secretary-general of the Organization of the Petroleum Exporting Countries said the group was committed to an output-cutting deal made in Algiers in September.
“We as OPEC, we remain committed to the Algiers accord that we … put together. All OPEC 14 (members), we remain committed to the implementation,” Mohammed Barkindo told reporters at a conference in Abu Dhabi.
Still, many analysts are market participants remain skeptical that a deal will get done. All of crude’s OPEC-fueled gains have been erased, and history shows that OPEC nations have a lot of trouble getting along.
“The numbers show that the best deal OPEC are likely to come up with is well short of what is needed to achieve a balanced market in 2017,” said David Hufton, managing director of PVM Oil Associates.
Then there’s the issue of Saudi Arabia, the largest and wealthiest OPEC nation, which recently threatened to actually boost production rather than lower it. A Barclays analyst noted that Saudi domestic oil demand appears to be falling, which means the country would need to raise exports just to keep production level.
Finally, U.S. oil output looks to be on the rise. The number of oil drilling rigs searching for oil has reached 450, which is the highest level in almost nine months.
More and more, it’s looking like oil’s price rut will continue into the foreseeable future — no matter what OPEC does.
The United States Oil Fund LP ETF (NYSE:USO) rose $0.14 (+1.40%) to $10.12 per share in premarket trading Monday. Year-to-date, the largest fund tied to WTI crude oil prices has fallen 9.27%.